World craving for Vietnam's robusta coffee has exports surging

Coffee shipments from Vietnam will set a new record this year, supported by
global demand for its key robusta variety.

Exports of all varieties are likely to top 1.8 million metric tons,
according to Do Ha Nam, the chief executive officer of Intimex Group, the
largest shipper in the country. Nam is also vice head of the Vietnam Coffee and
Cocoa Association, the main industry grouping in the world’s largest robusta
grower.

“The world market has consumed all the coffee shipments from Vietnam,” Nam
said in an interview. “Supplies have been insufficient to meet demand.”

Coffee Craving

Vietnam's exports are forecast to hit a record

Global consumption of robusta, mainly used by companies including Nestle SA
to make instant coffee, is forecast to climb to a record this season, supported
by growing demand for the instant variety in developing markets. That’s good
news for farmers in Vietnam, who enjoyed a 10 percent jump in local prices in
October as global benchmark futures rebounded.

To feed that demand, Intimex this year added three robusta processing plants
with a combined capacity of 180,000 tons, bringing its total capacity to
750,000 tons, Nam said last week. The company expects its overseas sales to
grow 20 percent to an all-time high of 510,000 tons this year. As well as being
an exporter, Vietnam imports beans for re-export and for domestic use.

Harvest Progress

Vietnam’s production in the 2018-19 year that started last month may climb
just over 2 percent to 1.83 million tons assuming normal weather, according to
the median estimate of 14 traders surveyed by Bloomberg. That compares with
1.82 million in a previous survey, and a 1.8 million ton forecast by Intimex
and Simexco Dak Lak, the second-largest exporter. The country’s agriculture
ministry in July said production would surpass 1.8 million tons.

Harvesting began in Dak Nong in late October. Other key areas, including the
coffee “capital” Dak Lak, will start collecting beans around the middle of
November, RCMA Asia Pte said in an emailed report.

RCMA expects a slight reduction in the estimated record crop triggered by
fungus diseases mainly in Dak Nong and unusual cherry droppings in Gia Lai. The
group earlier projected that 2018-19 season output would rise to 1.92 million
tons. It sees exports at a record 1.76 million tons this season.